Not only was Third Way’s argument immediately and widely debunked – Salon’s Elias Isquith did it very well here – but its domination by Wall Street became an issue in itself, thanks to folks at Daily Kos and the Progressive Change Campaign Committee. Warren herself responded by asking Wall Street CEOs to voluntarily disclose their think tank funding – without mentioning Third Way by name – suggesting it amounted to “little more than another form of corporate lobbying.”

Is something going on here? I’d say yes. Wall Street’s domination of the Democratic Party is facing a genuine and sustained fight, and that’s a good thing for Democrats and the country.

Remember, it was only last year that Third Way made big news warning that ol’ devil economic populism would be a dead-end for Obama. No, it was worse than that: Third Way said its polling showed that Obama’s message of “fairness” was a loser; voters preferred to hear about “opportunity.” Fairness, people. They came out against a “fairness” message as too radical. Liberals debunked the poll, but Third Way got a big endorsement from the New York Times columnist Bill Keller, who used the group’s faulty data to warn Obama that he was turning off independents by being “a plutocrat-bashing firebrand” and pushing “Robin Hood” politics like the Buffett Rule.

In fact, as I argued back then, during Obama’s first term his political fortunes improved when he strengthened his message of economic populism, and plummeted the more he preached about bipartisan deficit-cutting and “shared sacrifice” as defined by plutocrats. If Third Way and Bill Keller were right, we’d be debating President Mitt Romney’s new tax cuts for the wealthy right now.

Of course Third Way wasn’t right. But there didn’t used to be a penalty for being wrong in the service of Wall Street’s agenda. Now their plutocracy-defending drivel is both debunked quickly and denounced by politicians – even the one they’re trying to demonize.

That Elizabeth Warren is a great tonic for the Democratic Party is not news (although her decision to attack Third Way’s donor base rather than quail at its attacks merits attention and more admiration). What seems new to me is a sustained feistiness among progressives. The push to expand rather than cut Social Security is already widening the debate and making it harder for any Democrat to fearlessly back even hidden cuts like the chained CPI. And the wave of fast-food strikes and Walmart protests is channeling the anger and moral outrage that inspired Occupy Wall Street, and then seemed to dissipate, into a policy agenda.

Which brings me to the president’s speech. He gave a similar one in the wake of the Occupy uprising, in Osawatomie, Kansas two years ago this Friday, and yet it’s been hard to translate his rhetoric into change. I find it hard these days to get excited about speeches, and yet, given the Republican extremism that’s led to gridlock, that bully pulpit is one of Obama’s most effective tools, and he doesn’t always use it to advantage. He did on Wednesday.

Obama called the “growing deficit of opportunity” a greater threat than the “rapidly shrinking” fiscal deficit. That’s important as Democrats face down Republicans in budget talks. And more vividly than before, he showed how the country’s post-World War II investments in building a middle class created a wider prosperity, while our current 40 year experiment with austerity and tax cuts has cut the heart out of the American dream.

Republicans and Fox News are already attacking the president’s speech as “class warfare,” and that’s fine. We’ve been living through class war for the last few decades, but only one side bothered to fight. For a time they enlisted a lot of Democrats, including Obama. Most people — not only progressives, even some Tea Partiers who aren’t driven by racism — know that Obama’s administration bailed out banks, but not their victims. Yet pampered CEO cry-babies responded to the president’s mild chiding over their obscene bonuses and renewed profiteering by comparing him to Hitler and funneling their cash to Mitt Romney.

Now, with income inequality continuing to worsen on Obama’s watch, he has to pick a different side in the class war if he cares about his legacy. I hope that’s what the speech Wednesday was about. I trust that an energized progressive movement, and its congressional allies, can hold him to it. We’ll see. But the energetic backlash against Third Way shows that economic populism isn’t a dead end but the way forward.